Information About the New Tax-Free Childcare Scheme from Autumn 2015

The new scheme will be available to families in which both parents work and will be worth up to £1,200 per child each year.

In the first year, all children under 5 will be eligible, with the age range eventually including all children under 12.

It is only available to families where both parents work, or for a single parent who works. Each parent’s earning must be less than £150,000 per year and must work at least 16 hours a week. For the first time this is also available to the self-employed.

However, if you receive tax credits or Universal Credit (which will be introduced in the next two years to replace tax credits) you are not eligible for this scheme, as parents can get up to 70% of childcare costs paid by the Government.

If you are already in the childcare voucher scheme, then you can continue to receive childcare vouchers or you can switch to the new scheme if preferred. The childcard scheme will not be permitted to any new members, from autumn 2015 you will have to join the new benefit scheme.

The new scheme will work by parents having access to an online account with a scheme provider. The amounts you contribute to your account will be topped up by the Government. For every 80p contributed by you, the Government will add an additional 20p to the voucher amount. This will be capped at a value of £1,200 per child.

You will still be able to use the voucher for any registered childcare, Ofsted in England, Care Inspectorate in Scotland, Care and Social Services Inspectorate in Wales and Department of Health, Social Services and Public Safety in Northern Ireland.

If you are currently on a childcare voucher scheme and have any questions regarding this new scheme, we recommend you speak to your current provider.

Recap over the key facts:

Childcare vouchers to continue indefinitely for scheme members as at 2015

New tax-free childcare scheme to commence in 2015 for families with 2 working parents or single parent with earnings below £150k pa each

Savings up to £1,200 per child

Online parent childcare account to be topped up by Government with 20p for every 80p contribution by parents, up to a maximum of £1,200 per child

Scheme initially available for children up to 5 but will later be extended to 12 years old

Scheme is for registered childcare, e.g. Ofsted in England and equivalent bodies in Scotland, Wales and Northern Ireland

Self-employed are eligible to join the scheme

Parents cannot join the scheme if they are in receipt of tax credits